The turnover rate refers to the ratio of the trading volume of a stock to the circulating capital within a certain period of time, reflecting the liquidity of the stock and the activity of market transactions. A high turnover rate means that the stock is traded frequently and the buying and selling power in the market is strong, whereas a low turnover rate means that there are relatively few transactions. A high turnover rate may mean that investors have greater interest in the stock or that there are greater trading opportunities. However, a high turnover rate may also mean that the short-term volatility of the market increases and speculation increases, which requires careful judgment.
We know that the circulating capital of different stocks varies greatly, and the stock prices also vary greatly, so the trading volumes of different stocks are not comparable. In addition, due to lifting of bans, bonus shares, etc., the circulating capital will also increase, so the same trading volume may have different meanings. The turnover rate can reduce these effects to a certain extent, but of course it is not absolute. The difference in turnover rates between large-cap stocks and small-cap stocks is still relatively large.
1. Calculation method of turnover rate
The formula for calculating turnover rate:
Turnover rate = trading volume / circulating capital × 100%
In Tongdaxin, the trading volume function is VOL, and there are three circulating equity functions, namely CAPITAL, FINANCE(7), and FINVALUE(239). Today we mainly understand the difference between CAPITAL and FINANCE(7).
1. CAPITAL function
Using the CAPITAL function, the turnover rate formula can be written as VOL/CAPITAL*100. In addition, Tongdaxin has its own turnover rate function, which can directly call the turnover rate data. DYNAINFO(37)*100 also represents the turnover rate. The results of these two writing methods are the same.
However, the CAPITAL function of circulating equity only has the latest circulating equity data and can be used in stock selection formulas. However, if it is used in indicator formulas to view historical market conditions or for indicator evaluation, the results will be inaccurate.
2,FINANCE(7)function
The unit of CAPITAL is lot, and the unit of FINANCE(7) is stock. When using it, you need to divide by 100 to make the two units consistent. FINANCE(7) This function can obtain historical circulating equity data and can be used to write indicator formulas and view historical market conditions. Using the FINANCE(7) function, the turnover rate formula can be written as VOL/(FINANCE(7)/100)*100.
In order to enhance understanding, the two functions can be made into sub-chart indicators and loaded into the sub-chart.
CAPITAL;
FINANCE(7)/100;
The difference between the two is as shown below. The white horizontal line is CAPITAL, and the changing yellow line is FINANCE(7)/100.
The difference between the two ways of writing turnover rate:
VOL/CAPITAL*100;{white line}
VOL/(FINANCE(7)/100)*100;{yellow line};
As can be seen from the figure below, when the difference between CAPITAL and FINANCE(7)/100 is relatively large, the result of writing VOL/CAPITAL*100 will be smaller in most cases. It is used to write indicator formulas to analyze historical market conditions. The result may be Quite the opposite.
2. Turnover rate sub-chart indicator formula
Some divisions can be made for the turnover rate (the divided intervals are only approximate ranges and can be modified by yourself):
The turnover rate is below 1%, the land is large, and the market is dull;
The turnover rate is 1%-3%, the transaction is sluggish, and the market is thin;
The turnover rate is 3%-8%, and transactions are active;
The turnover rate is 8%-15%, and the trading volume is enlarged;
Turnover rate 15%-25%, huge amount;
A turnover rate of more than 25% is relatively rare, and the trading volume is abnormal and requires attention.
HSL:=VOL/(FINANCE(7)/100)*100;
Turnover rate: HSL, NODRAW;
Land volume:=HSL<1;
Light:=HSL>=1 AND HSL<3;
Active:=HSL>=3 AND HSL<8;
Large volume:=HSL>=8 AND HSL<15;
Huge amount:=HSL>=15 AND HSL<25;
Exception:=HSL>=25;
STICKLINE(land volume,HSL,0,2,0),COLORBLUE;{land volume, blue}
STICKLINE(light,HSL,0,2,0),COLORYELLOW;{light,yellow}
STICKLINE(active,HSL,0,2,0),COLORMAGENTA;{active,magenta}
STICKLINE(HSL,0,2,0),COLORLIRED;{High volume, light red}
STICKLINE(HUGE,HSL,0,2,0),COLORRED;{HUGE,RED}
STICKLINE(Exception,HSL,0,2,0),COLOR800040;{Exception, purple};
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Friendly reminder: This article is only for learning and communicating technical indicator formulas and does not constitute any investment advice. Investment is risky, so be cautious when entering the market.